I'm a multiple-time entrepreneur, living and working in the heart of Silicon Valley for the past quarter century. Currently, I spend most of my time working on a new startup in the online education arena. I've got a BA in political science and an MBA from Stanford. Having been around technology and business on the leading edge, I write mostly about what's new and what's coming for companies and the country. You can find me on Facebook, Twitter and Google+ You can e-mail me at forbes_at_rogodotnet

Tesla's BMW 3-Series Fighter Just Might Be Your Next Car

This is the fourth in a series on the state of the electric vehicle, with a focus on U.S.-based Tesla Motors. Click these links for Part 1, Part 2 and Part 3 or find them below as well.

Tesla CEO Elon Musk doesn’t take to Twitter very often, which is probably a disappointment to his 166,000+ followers. But when he does, the one-man conglomerate often has something interesting to say and this past Friday night, he didn’t disappoint.

.@joshj777 It has always been my dream to produce a low cost, compelling electric car. We are 3 to 4 years away. Wish it could be sooner.

On the heels of Tesla’s recent news it had to delay the Model X crossover until 2014, this wasn’t a huge surprise. The so-called third-generation platform had been expected to follow the Model X by a “few years” per Tesla’s previous remarks and its recent SEC filings, so this was consistent. But it was still a tease and it wasn’t clear Musk would offer much more in the way of information. Still, @benmacy figured he’d ask and, lo, Musk replied:

Wow, what could this technology be? There was a hint in the annual report about battery-swapping stations, a la struggling EV startup Better Place. Could it be that? Or perhaps some kind of range extending technology, a la the Chevy Volt (even though Tesla has spoken negatively of such concepts in the past)? More likely, it’s something even more radical. We won’t know for a while, but what we will know is a bit more about the car, because Musk was chatty enough to reply to @MichaelLindahl with some more juicy details:

@michaellindahl It will be slightly smaller w fewer features as std. Think Audi A4 or BMW 3 vs Model S being S7 or M5

Add these up and you can’t help but get excited as an electric-vehicle enthusiast. For starters, let’s talk price. A stripped 3-series BMW is $32,500 today. Tesla is talking about their “third series” starting at less money (in today’s dollars) — but with comparable luxury. In fact, $30,000 would get you a well-equipped Toyota Camry while realistically, you won’t drive off the lot at your Audi or BMW dealer for less than about $40K. The Tesla seems headed for similar.

Still, we are talking about an entry-level luxury vehicle for what can loosely be described as “the masses” here. The Camry might not be the target, but given the savings in operating costs of an electric vehicle, it’s actually reasonable to include it in the comparison as Musk notes:

But when considering savings of gas v electricity, true cost vs gas cars is more like $25k for a v sweet ride

In addition to 403,000 Camrys last year, U.S. consumers bought 331,000 Honda Accords, 241,000 Ford Fusions and 230,000 Hyundai Sonatas, among others — in other words, well over a million vehicles. Among entry luxury vehicles, the BMW 3-series sold very nearly 100,000 in total, with 82,000 C-class Mercedes, 60,000 Infiniti G’s, and 38,000 Audi A4s in the mix. (All stats courtesy of the amazing site GoodCarBadCar).

Basically, Tesla is making a move from niche to mainstream once it has a handle on two critical things (1) manufacturing at scale (2) a cheaper battery to make the less-expensive car viable. The first of those just took a giant step as the company announced it is already ahead of the manufacturing pace it needs to hit its production goal of 20,000 cars in 2013. In fact, the company is currently running at “more than 500 Model S deliveries per week.”

On the battery front, while research continues looking for breakthroughs, Tesla sounds confident that the incremental progress they are already seeing will at least achieve enough to deliver the 200+ mile, mostly-affordable vehicle that could make EVs mainstream. In the next segment, we’ll talk about battery developments, and when and whether the 500-mile, affordable battery will likely become reality.

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Make a standard, user-replaceable battery that can be swapped out easily, like at a gas station, and you’ll sell a ton of these. It doesn’t even have to be every battery in the car that needs to get swapped. Just portion of the batteries to extend your range enough till the next charging point or battery swap point.

Tow trucks can carry a set just to get you going if you’ve managed to strand yourself, and charge you an arm and a leg for it.

They’d need to drastically improve the capacity of batteries and make them smaller before they can make them “hot-swappable”. As it stands now the battery system on a Tesla Roadster weighs nearly 1,000 pounds.

Like nobody ever spends $4k replacing a gasoline engine or automatic transmission? In fact traditional cars can be wicked expensive to keep running if you happen to get a lemon. Expensive repairs are not the exclusive purview of the electric car.

Current statistics showing operating costs of hybrids such as the Prius are showing *below average* operating costs, as ten-year-old Priuses seem to be running around on their original batteries without any trouble. Who’s to say it won’t be the same with the full electrics? Time will tell.

Tesla gives their battery systems a life span of about 7 years. After that they charge 36,000 dollars to replace them, or you can order a 7-year replacement “up-front” at the time of purchase for 12,000. It is pretty expensive they will be cheaper in other areas such as maintenance and cost of fuel. Of course that cheaper maintenance only really applies if you live in an area such as southern California where there are actually mechanics who can work on an all-electric vehicle.

What?!? Where do you get your info? A “life span” of 7 years?? It’s warranty is for 8 years. So when an ICE is warrantied for 4 years, does it die right after that? You are correct about the $12000 replacement cost for the 85kwh battery. The smaller batteries will be less. Only cheap maintenance in CA?! Tesla Ranger Service. Anywhere, anytime. They come to you if you can’t get to them. Doesn’t get much better than that. And no, they don’t all fly out of CA. There are service centers all across the country. Tesla’s biggest obstacle will be mass ignorance.

And how much is this “ranger service”? I can’t imagine they have much infrastructure in place to service my vehicle in rural Northern Michigan where I live. The 7-year figure comes from Tesla itself, though it’s a bit dated from a blog post in 2009. They don’t say the battery will be DEAD after 7 years/100,000 miles, but that the capacity will be diminished by about 70%, meaning it will be due for replacement. I am not that concerned about it as most people don’t hang on to a car for 7 years or more anyways, but for used cars it will certainly be an issue.

You write as though you’re intimate with all things Tesla yet you’re unaware of their Ranger Service? It’s not new. Even the Roadsters had/have it. http://www.teslamotors.com/service#/tesla-service (not sure if Forbes allows a link) For those that can’t or won’t read it, ANYWHERE service is $100 per visit or unlimited if you prepay service. I live even further away from a service center than you and it’s still $100, but I’m going to prepay so I don’t have to think about it. Find another manufacturer that comes to you… You’re battery stats are backwards. It doesn’t degrade 70%, leaving 30% of the original battery as you suggest. Worst case was you could degrade 30%(meaning 70% remains) after 100,000 miles and I’m pretty certain that was pertaining to the Roadster. The Model S battery is much better controlled.